Fresh calls for Treasury Secretary Tim Geithner's resignation are emerging following a new Bloomberg
report. At the peak of the financial meltdown, the Geithner-led New
York Fed instructed bailed-out insurance giant AIG to "to withhold
details from the public" about the insurer's payments to banks. Those
details included AIG's agreement to repay a number of banks $62.1
billion in toxic assets, a move many have criticized as "backdoor
bailouts." Why did the New York Fed want to hide the details? Speaking
for the skeptics, Reuters's Felix Salmon says
we can only "assume the worst." Here's how other finance bloggers are parsing the new story:
- Now It All Makes Sense, writes Ed Morrissey at Hot Air: "Geithner and his cohorts wanted to make sure they covered their tracks
while using AIG as both a whipping post and a money-laundering device
in order to effect the rescue of politically-connected private
- Geithner Kept AIG Quiet to Advance His Career, suggests Felix Salmon at Reuters: "All of this secrecy coincided with Geithner’s nomination to be Treasury
secretary, which makes the whole thing stink much more: was Geithner
deliberately trying to keep anything potentially damaging secret for
the sake of his own personal career progression?"
- A Major Blow to Transparency, writes Michael Corkery at The Wall Street Journal: "These
emails raise a far more serious and fundamental issue: The government
hiding material financial information from the public. Disclosure is
the bedrock of good government and market investing. Both seem
compromised in the AIG bailout."
- Geithner Must Go, writes Edward Harrison at Credit Writedowns: "He was on the job when these firms levered up and took reckless
risks that endangered our financial system. For him to absolve himself
of responsibility is a disgrace. And to add insult to injury, we now
learn that he urged a systemically important company to withhold
evidence of his looting of taxpayers. Tim Geithner must go."
- Give Tim a Break, writes a sarcastic Jessica Pressler at New York Magazine: "To be fair, you can kind of see his reasoning. Allowing banks like
Goldman Sachs and Société Générale to cash out their insurance in
comatose insurance company AIG for 100 cents on the dollar, the $62.1
billion tab of which would ultimately be paid by the taxpayer, without
even trying to get them to take a haircut — well, that just looked so bad.
Like Anthony Marshall–forging-his-mother's-signature-on-her-will bad."
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